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According to the U.S. Department of Energy, an estimated 20-50% of industrial energy input is lost as waste heat.
Many industrial organizations in the U.S. have learned how to recover waste heat, yet few understand how to monetize it.
Industrial waste heat is the energy generated in an industrial process that is not put to practical use. Waste heat sources include hot combustion gases discharged to the atmosphere, heated products exiting industrial processes, and heat transfer from hot equipment surfaces.
Waste stream recovery involves capturing and reusing waste heat for the purpose of heating or for generating mechanical or electrical work.
Example uses for recovered waste heat include:
- Generating electricity
- Preheating combustion air
- Preheating furnace loads
- Absorption cooling
- Space heating
Types of industrial manufacturers that are good candidates for waste heat recovery include:
Glass Manufacturing–Regenerators and recuperators are the most frequently used systems for waste heat recovery in the glass industry, which collectively consumes approximately 300 TBtu/year.
Cement Manufacturing–The cement industry consumes about 550 TBtu/year with its most energy-intense processes including those which mine and prepare raw materials for the kiln, clinker, production, and cement milling. Options for heat recovery include preheating meal and power generation (cogeneration).
Iron and Steel Manufacturing–Consuming approximately 1,900 TBtu of energy per year, the U.S. iron and steel industries are prime candidates yet face a challenge for executing economically sound heat recovery. While recovery from clean gaseous streams in these industries is common, heat recovery techniques from dirty gaseous streams (from coke ovens, blast furnaces, basic oxygen furnaces, and electric arc furnaces) often incur high capital investment costs.
In several deregulated markets in the U.S.–PJM, for example–recovered waste heat can be monetized by offering the recovered resource into the region’s forward capacity market.
Forward capacity markets like PJM’s Reliable Pricing Model (RPM) allow the grid operator to procure the grid’s required capacity in advance of its delivery day.
Implemented in 2007, PJM’s Reliability Pricing Model uses a market approach to obtain the capacity needed to ensure its grid’s reliability.
The RPM’s market approach includes incentives that stimulate investment in existing generation from traditional sources like power plants while encouraging the development of other resources such as demand response and energy efficiency.
In many cases, organizations that are already participating in waste stream recovery can realize easy earnings akin to found money that requires little work to obtain other than offering the recovered resource into the market.
To learn more about monetizing waste stream recovery and how to offset the rising U.S. energy expenditure share, read CPower’s “Demand-Side Energy Management in the U.S. Manufacturing Industrial Sector: an analysis of revenue-generating strategies.”
In this paper, CPower’s Meg Kelly will explain how organizations can earn revenue for their qualified energy efficiency (EE) projects by offering their permanently reduced demand into PJM’s forward capacity market.
The paper will detail what types of projects qualify for monetization and the best practices for measuring and verifying EE projects so they can earn maximum revenue through PJM.
Data centers are in demand.
The growth of cloud computing and the subsequent challenge of powering big data has led to a data center construction boom.
A 2018 industry profile by Dun & Bradstreet predicts data center space to grow to 1.94 billion square feet worldwide in 2018. Much of the industry’s new construction aims to continue the trend toward energy-efficient buildings, shedding the label of “comatose power drains” issued by the New York Times in a 2012 article that claimed, “data centers can waste 90% or more of the electricity they pull off the grid.”
Since the early 2000’s, data-hosting organizations have sought to discard their profligate reputation by making their buildings more efficient and (if at all possible) environmentally responsible.
While more efficient than their early 21st century iterations, data centers continue to use a lot of electricity–up to 50 times more than standard office spaces—and subsequently face the high expense of large-scale electricity consumption.
Green data centers–those which are environmentally responsible and resource-efficient–aim to lower costs and create a more sustainable operation through improved design and by using more efficient equipment. According to the London-based research organization Technavio, the green data center market is expected to grow at a compound annual rate of about 15% by 2021.
Data hosting organizations that have upgraded their existing facilities to be more energy efficient may be eligible to earn money for the permanent reduction of their electric demand.
That’s because the data center industry’s recent push toward a more efficient and sustainable future comes at a serendipitous time when energy markets around the country are working to reduce demand via energy efficiency investments and to integrate distributed energy resources (DERs) onto their energy grids in an attempt to diversify their fuel mixes.
Right now and for the foreseeable future, grid operators and electric utilities in each of the nation’s six deregulated energy markets have created a wealth of incentive programs to encourage commercial and industrial organizations to invest in energy efficiency and to monetize their generation capacity.
Energy Efficiency: Earn money for permanently reducing demand
Organizations that have recently upgraded their data center facilities by way of installing high-efficiency HVAC equipment, investing in more energy efficient IT technologies, improving airflow or data management and more may be eligible to earn money for their energy-reducing efforts.
Energy Efficiency (EE) is the permanent reduction of electrical demand through the installation of efficient systems, including improvements or upgrades to building infrastructure, mechanical systems, existing equipment or new devices.
In some energy markets in the US (PJM and New England, for example) organizations can earn money for these permanent reductions in demand by partnering with a licensed demand-side management company who can offer these “negawatts” (capacity from conservation rather than power generation) into the Independent System Operator’s (ISO) forward capacity market.
Many electric utilities offer incentives to organizations that have permanently reduced demand through energy efficiency projects. These opportunities create another revenue stream to either decrease project paybacks or allow for reinvestment for future projects.
Demand Response & DERs: earn money for helping the grid
Most data centers are powered by electricity from the grid, which is susceptible to outages due to the demand for energy outpacing the grid’s ability to supply it.
Data centers can’t afford to be down due to a brownout or blackout for a single second, lest they risk losing their customers forever.
The use of on-site power generation is, therefore, a ubiquitous practice amongst data centers. While primarily seen as a reliability resource of paramount importance, a data center’s generation capacity can also be a revenue-generating asset for organizations that participate in demand-side energy management, particularly demand response.
When the grid is stressed and demand for electricity exceeds supply, the grid operator must work to restore the balance.
Instead of calling for the generation of more energy at great expense to consumers and the environment, the grid operator can offset the imbalance by calling on commercial and industrial organizations to reduce the amount of electricity being consumed from the grid when demand exceeds supply.
That’s demand response–programs that pay organizations to reduce electricity usage during times of grid stress or high energy prices.
For data centers with on-site backup generation, earning money through demand response participation is possible without sacrificing service to customers. That’s because a properly permitted backup generator can play a starring role in an energy curtailment strategy that can lead to significant earnings for data centers.
When selecting a company to guide your demand-side energy management, it’s important to consider the company’s scope of demand-side expertise. Do they serve the markets where your properties reside? Does the company specialize in one type of demand-side energy management, or is it equally skilled in a wide range of energy asset monetization practices?
Most importantly, a demand-side energy management partner should earn your trust in every aspect of the relationship your organizations share.
Demand-side energy management is not a one-size-fits-all exercise. No two buildings are alike and every data center organization is unique in its complexities.
Like your business, your demand-side energy management strategy should evolve and refine over time, forever in pursuit of perfection as energy markets continue to change and your needs as an organization evolve.
Virginia Beach, Virginia – Energy Manager’s determined pursuit of energy efficiency savings earned the city tens of thousands of dollars in rebates in just a few short years. (Download this case study as a PDF)
THE CUSTOMER: THE CITY OF VIRGINIA BEACH
Located where the Chesapeake Bay meets the Atlantic Ocean, the City of Virginia Beach is anything but a sleepy resort town. It is the most populous city in the Commonwealth of Virginia, and boasts an economy comprising tourism, national and international corporate headquarters, advanced manufacturing, military bases, and agribusiness.
Besides the beach (the longest pleasure beach in the world, according to the Guinness Book of Records), visitors are drawn year-round to Virginia Beach’s many renowned attractions, including:
- The Virginia Beach Convention Center the nation’s first convention center to earn LEED® Gold certification as an existing building from the U.S. Green Building Council;
- The Virginia Aquarium & Marine Science Center, which attracts 650,000 visitors a year and hosts more than 10,000 fish, mammals, birds, and reptiles representing more than 300 species from around the world; and
- The Virginia Beach Boardwalk, three miles of oceanfront access, bike paths, live entertainment, restaurants, shops, and a 12-ton bronze statue of King Neptune.
Keeping the Convention Center, the Aquarium, and 350+ city buildings running in top shape uses a great deal of energy. That means, Virginia Beach is a city that understands the value of world-class demand-side energy management in municipal operations.
THE CHALLENGE: PERMANENT ENERGY (AND COST) REDUCTION
Virginia Beach’s city government serves its citizens and visitors from more than 350 facilities citywide. By 2010, constant increases in energy costs incurred at these facilities had risen to $20 million a year, a total plagued with “lost” buildings and meter reading errors in the hundreds of thousands of dollars.
To address this and other issues, including utility billing, Virginia Beach created the position of Energy Manager and hired Lori Herrick, MBA, LEED Accredited Professional, to lead its energy initiatives and manage municipal energy expenditures. With $5 million from the city, an unexpected $4 million windfall from the U.S. Dept. of Energy, and a mandate to conquer the city’s energy challenges—Ms. Herrick went to work.
THE CPOWERED STRATEGY: FINDING READY KILOWATTS
Energy efficiency (EE) projects result in permanent energy reductions, which the city recognizes as arguably the cheapest, most abundant, and most underutilized resource available to local government. With this in mind, Ms. Herrick sought to find out more about an energy program being offered through DMME, the state’s Division of Mines, Minerals and Energy. The program in question promoted energy performance contracts (EPC) to significantly reduce energy costs through energy efficiency measures that meet a guaranteed level of energy savings.
Ms. Herrick began the process of enrolling city facilities in DMME’s EPC programs, but was soon faced with the complex challenges of identifying what facilities, and how many kilowatts, to enroll. Fortunately, she received another windfall. She was introduced to CPower’s champion of Virginia demand-side energy management, Leigh Anne Ratliff.
Ms. Ratliff has worked with DMME since 2007 to offer integrated demand response services on a performance basis with no set up costs to the state. Demand response programs pay organizations such as government agencies for curtailing, or reducing, their electricity usage during times of high demand. Government entities who participate in demand response both save costs on reduced electricity use and earn revenue for their trouble.
As Ms. Herrick soon found out, CPower has an additional strength: the ability to provide complete measurement & verification (M&V) services for energy efficiency projects, necessary to receive utility rebates and credits. More importantly, CPower has unmatched experience in finding additional kilowatts (kWs) all too easily overlooked in already completed energy efficiency projects—and successfully submitting those kWs for even greater returns on the city’s investments.
CPOWERED SOLUTION: FOLLOW THE DATA (AND FIND THE MONEY)
Because the permanent energy reductions resulting from energy efficiency projects can pay dividends for up to four years after completion, Ms. Herrick and Ms. Ratliff set about the task of unearthing four years’ worth of city files to find buried EE gold – kilowatts that others missed. Looking back, Ms. Herrick says, “We were determined… it was kind of a no-brainer, to go through the files of projects we’ve done and submit the information. We were analyzing these projects to make sure the payback was there… They gave us a lot of data that Leigh Anne could use to calculate our benefit to the grid and then give us a check for it.”
From the outset, Ms. Herrick considered no project too big to tackle, working to help the Virginia Beach Convention Center earn its LEED® Gold certification (see below). She also considered no project too small to enroll, at one point submitting a 7kW project. As Ms. Ratliff explains, “If she had it, she sent it. One building got a credit for $52 in 2017. We’re learning on the cost-benefit element of this, but Lori is always looking further, to get every bit out of it that she can. In that way, she’s revolutionized what people put into energy efficiency.”
SPOTLIGHT: VIRGINIA BEACH CONVENTION CENTER
The Virginia Beach Convention Center (VBCC) is the crown jewel among the city’s facilities. It was the first convention center in the state to receive certification from Virginia Green, the Commonwealth’s voluntary campaign to promote environmentally friendly practices in Virginia’s tourism and hospitality industries. As noted above, it is also the nation’s first convention center to earn LEED® Gold certification as an existing building from the U.S. Green Building Council. These certifications are increasingly important in the competitive convention planning industry, where the VBCC competes nationally. Customer awareness of, and insistence on, “sustainable destinations” plays a greater and greater role in siting conventions.
The VBCC is also a shining example of how state-ofthe-art EE projects can enhance a city’s energy budget as well as its national reputation. Nearly all lighting in the convention center is LED lighting, and the HVAC is controlled through a state-of-the-art Direct Digital Control (DDC) system that incorporates an automated demand response program to control spikes in peak electricity demand. The automation limits any impact to convention-goers and still saves energy dollars.
“Together, we developed a process to systematically go through the building to reduce demand with the least impact on customer events.” – Leigh Anne Ratliff
It’s also a shining example of how the city and CPower Engineering worked together to successfully address one of the biggest challenges facing active convention centers: controlling peak demand electricity and total kilowatt usage. Event load-ins and load-outs at VBCC can be particularly problematic because the bay doors open directly from the loading dock into conditioned exhibit space.
“The Convention Center was a very cool energy project, because people in that space change every day,” Ms. Ratliff explains. “Bay doors are open for hours at a time, a lot of bodies and boxes moving in and out. The open bay doors are a significant source of heating and cooling loss. So how do we control that without disrupting loadins and other convention-goers already onsite?”
The first step was to analyze the status of the bay doors during times of peak demand. The Center’s zoned DDC system, which controls the Center’s HVAC, was programmed to prevent the air conditioning from running in the exhibit halls if the bay doors were open. In addition, the DDC system receives power pulses from the electricity switch gears throughout the day. In the next phase, an automated demand response program was integrated into the DDC system. When the system reads that the Center’s demand is getting ready to peak, it automatically implements one of three phases. Phase 1 changes back-of-house temperatures by one degree. If demand continues to peak, it implements Phase 2, which changes back-of-house temperatures by two degrees, all the way to three degrees at Phase 3. This automated program reduces the demand on VBCC’s chillers, which in turn reduces peak electricity demand.
“Our CPower engineers worked with VBCC’s staff to understand how the bay doors and events taking place in the building impact peak demand and usage,” Ms. Ratliff says. “Together, we developed a process to systematically go through the building to reduce demand with the least impact on customer events.”
With its DDC system program finalized and firmly in place, the Convention Center was able to ease demand on the grid, with near-zero disruption to its customers’ activities. In fact, the Center saved an astonishing 15 percent off their peak during its first year. And since the price of electricity peaks along with demand, this translated into significant cost savings that they otherwise would not have been able to attain.
THE RESULTS: $87,000 AND COUNTING
CPower is instrumental in helping the City of Virginia Beach navigate the complexities of PJM energy efficiency credits and paybacks. CPower submitted the uncovered EE data to PJM and earned the city both savings and revenue. For the delivery years 2017 through 2022, earnings from PJM for the city will reach just over $87,000 (see chart), with the VBCC earning $40,000 alone. And the city’s just getting started. “We just got another big round of funding,” Ms. Herrick says, “so Leigh Anne’s going to be hearing a lot from us.”
LOOKING AHEAD: DEMAND RESPONSE
In November, 2017, the Commonwealth of Virginia retained CPower through 2020 to continue to offer integrated demand response (DR) services to state agencies and departments through DMME. Ms. Herrick worked with Ms. Ratliff to identify five city sites they believe could be the most eligible for DR: Judicial and correctional facilities, the Convention Center, the Aquarium, and the central plant. The Convention Center currently participates in CPower’s DR program and earns revenue. The remaining facilities are undergoing audits to better understand their suitability. “DR involves curtailment, and we have to be careful when and how we curtail,” Ms. Herrick says. “That’s especially true of the aquarium. I want to earn revenue for the city, but we also don’t want to be responsible for a fish fry.” There’s no doubt, though, that Ms. Herrick will find a way to make it work. Above all else, she and the city are determined.
CPower will support their energy goals at every turn, with an energy strategy custom-made to meet their unique requirements.
SAVINGS AND EARNINGS: CITY OF VIRGINIA BEACH/VIRGINIA BEACH CONVENTION CENTER
Projects include lighting and green building. Sites include Aquarium, Boardwalk, Convention Center, library, maintenance garages, recreation centers, fire stations, police stations, EMS administrative and training center, and arts center.
City of Virginia Beach
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Virginia Beach Convention Center
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